At the beginning of 2019, Able Company had the following portfolio of investments in trading securities (all of which were acquired at par value): Security Cost 1/1/2019 Fair Value A $20,000 $25,000 B 30,000 29,000 Totals $50,000 $54,000 During 2019, the following transactions occurred: May 3 Purchased C debt securities at their par value for $50,000. July 1 Sold all of the A securities for $27,000 plus interest of $1,000. Dec. 31 Received interest of $7,600 on the B and C securities. Additionally the following information was available: 12/31/2019 Fair Value Security $29,000 52,500 Required: 1. Prepare journal entries to record the preceding information. 2. Next Level What justification does the FASB give for its treatment of unrealized holding gains and losses for trading securities? 1. Prepare journal entries to the transactions. General Journal Instructions PAGE 1 GENERAL JOURNAL DATE ACCOUNT TITLE POST. REF. DEBIT CREDIT Chart of Accounts REVENUE ASSETS 111 Cash 113 Investment in Trading Securities 411 Sales Revenue 431 Interest Income 441 Gain on Sale of Trading Securities 114 Investment in Available-for-Sale Securities 119 Allowance for Change in Fair Value of Investment 121 Accounts Receivable EXPENSES 500 Cost of Goods Sold 141 Inventory 152 Prepaid Insurance 511 Insurance Expense 512 Utilities Expense 181 Equipment 189 Accumulated Depreciation 521 Salaries Expense 191 Investment in Held-to-Maturity Debt Securities 532 Bad Debt Expense 540 Interest Expense LIABILITIES 541 Depreciation Expense 559 Miscellaneous Expenses 211 Accounts Payable 231 Salaries Payable 910 Income Tax Expense 250 Unearned Revenue 261 Income Taxes Payable EQUITY 311 Common Stock 331 Retained Earnings 390 Unrealized Holding Gain/Loss: Trading Securities 391 Unrealized Holding Gain/Loss: Available-for-Sale Securities 2. What justification does the FASB give for its treatment of unrealized holding gains and losses for trading securities? | Reporting unrealized gains and losses in income for trading securities provides more relevant information that reflects the underlying economics of the investment. | The securities are actively managed making the inclusion of gains and losses irrelevant. Il only I and II I only Neither I nor